What makes a stock "high volatility"?

High volatility stocks experience larger and more frequent price movements compared to the overall market. These price swings can be caused by several factors including news events, earnings reports, industry changes, or broader economic shifts. While this volatility means greater risk, it also creates potential for higher returns if timed correctly.

Why would I want to invest in volatile stocks?

Volatile stocks offer the potential for greater returns in shorter timeframes compared to more stable investments. If you have higher risk tolerance and are willing to accept the possibility of larger losses in exchange for potentially larger gains, these stocks might align with your investment strategy. They're particularly attractive to investors who actively monitor their investments and can respond to market changes.

How should I approach risk management with volatile stocks?

When investing in high volatility stocks, risk management is crucial. Consider allocating only a portion of your portfolio to these assets, balancing them with more stable investments. Setting clear exit points before investing can help limit losses. Some investors use stop-loss orders to automatically sell if a stock drops to a predetermined price. Regular monitoring and staying informed about company developments is also essential.

Are companies like ARM and PLTR considered tech disruptors?

Yes, companies like ARM (chip design) and Palantir Technologies (PLTR, data analytics) are considered technological disruptors in their respective fields. ARM's processor designs power countless devices worldwide, while Palantir's advanced data analytics platforms are transforming how organizations use information. Their innovative approaches to solving complex problems can lead to significant market advantages, but also contribute to their stock volatility as investors react to developments, competition, and future potential.

7 handpicked stocks

High Volatility Stocks

These carefully selected stocks offer higher growth potential alongside greater price swings. Our professional analysts have identified companies with dramatic price movements that could mean bigger opportunities for investors comfortable with risk.

Han Tan | Market Analyst

Updated 2 days ago | Published at मई 7